Research Discussion Papers, Bank of Finland
Oz Shy and Juha Tarkka
Stock exchange alliances, access fees and competition
Abstract: This paper investigates the market consequences of
alliance formation among stock exchanges. These alliances enable brokers to
match investors internationally at their local market, thereby eliminating
the need for brokers to maintain memberships in foreign stock exchanges. We
sort out the conditions under which alliance formation increases profits
for stock exchanges and brokers, and how changes in fee structures affect
investors’ participation rates and welfare. Finally, we examine several
methods for implementing access fees and their welfare implications.
Keywords: stock exchange alliances; access fees; competition among stock exchanges; (follow links to similar papers)
JEL-Codes: G20; (follow links to similar papers)
42 pages, October 9, 2001
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